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New Star's figures were accompanied by plans for a 125p-a-share return of capital to shareholders in June, worth £363m, as well as a move from Aim to the main market. The results were impressive, too. Helped by a positive economic and stock-market backdrop and, despite the market correction early last summer, assets under management rose 26 per cent in the period to £21.1bn. And, since the year-end, group assets under management have grown further, to £22.8bn.
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The star turn was the top-selling New Star Property Unit Trust, where funds managed grew from £765m to £1.8bn - its focus has been on office buildings, especially in the City of London. New Star now plans to launch a fund in the summer specialising in overseas commercial property. But it was also a year of exceptional growth for the international retail funds, where assets under management grew 252 per cent to £1.1bn. Indeed, the recent stock-market turbulence seems to have had a negligible impact on New Star's retail sales. Brokers expect pre-tax profits of £86m for 2007, giving EPS of 27.5p.
| Ord price: 456p | Market value: £1.33bn |
|---|---|
| Touch: 456-459p | 12-month High: 487p Low: 328p |
| Dividend yield: 2.0% | PE ratio: 34 |
| Net asset value: 36p* | Net cash: £19.2m |
| Year to | Turnover | Pre-tax | Earnings | Dividend |
|---|---|---|---|---|
| 31 Dec | (£m) | profit (£m) | per share (p) | per share (p) |
| 2005 | 95.1 | 16.8 | 5.02 | nil |
| 2006 | 134.0 | 50.0 | 13.50 | 9.0 |
| % change | +41 | +198 | +169 | - |
Plans to place 16 per cent of the shares held by New Star's staff could hold the price back in the short term and a forward PE ratio of 17 isn't that cheap, either. That said, led by its property funds, New Star looks set for continued strong growth. Good value.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
